Difference Between Sale and Exchange?

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Difference Between Sale and Exchange?

Aryan Mohanty

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May 25, 2022

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Bhanu · Answer 1 · 2022-05-25T15:51:45+00:00

Hey there, It often happens that during property transfer, people get confused between sale and exchange. It is a silly but genuine mistake since not all of us are very well aware of every property-related term. I came to fully understand the difference between sale and exchange when my paternal property was being transferred to my uncles and my father. So, I am going to tell you all I know about sale and exchange through what I experienced during the transfer of my paternal property. Check out amazing properties in your area at the best rates on NoBroker and save lakhs on brokerage costs.

Sale:

Both the seller and the buyer (parties to the sale) must be competent to transfer: Under Section 10 of the Contract Act, both the seller and the buyer must be competent to contract, i.e. the parties to the transfer should not be a minor, a person of unsound mind, or a person disqualified by law.
The subject matter of the sale must be a movable property that can be transferred.
Price consideration: A transfer of ownership is only a sale if the price consideration is paid, promised, or partially paid or promised.

Exchange:

There must be two distinct people who agree on something and two distinct things.
It could be moveable or immovable, both movable and immovable, or one movable and one immovable.
In this form of transaction, each person acts as both a seller and a buyer.
The individuals must be the owners of the items being transferred.
There can be no exchange in a transaction where there is no transfer of ownership. A family settlement or a partition, for example, would not be deemed an exchange.
There is no monetary exchange; the consideration is property rather than money.
Only a registered deed can be used to exchange immovable property worth more than Rs. 100.

Difference between Sale and Exchange under transfer of property act.

Sl. No.	Sale	Exchange
1.	Only immovable property is sold	Whereas both movable and immovable property is exchanged.
2.	The consideration in a sale is the price paid or promised and partially paid or promised	Whereas the consideration in an exchange is the consideration for the transfer of one property for another property
3.	In the case of a sale, the seller has a charge for unpaid buy money	But there can be no seller's charge for unpaid purchase money in exchange.

Read More: How Can I Get Sale Deed Online? What is Exchange Under Transfer of Property Act?

Jahnvi Dev · Answer 2 · 2022-08-30T10:28:51+00:00

Hi there, Most of us interchangeably use the words sale and exchange. But sale transfer or exchange are totally different terms. The word ‘sale’ suggests ‘voluntary transfer of property from one person to another for a price’. On the other hand, the term exchange suggests ‘ ‘to part with, give or transfer an equivalent’. As per section 54 and section 118 of the transfer of property act 1882:

Sale means: ‘Sale is a transfer of ownership in exchange for price paid or promised or part-paid and part promised.’
Exchange means: “When two persons mutually transfer the ownership of one thing for the ownership of another, neither things or both things being money only, the transaction is called ‘an exchange’.”

To sell your property post a free advertisement on NoBroker and save lakhs on brokerage! Rent/Buy property on NoBroker without any headache and earn good profit! Now that I have stated the legal definition of sale and exchange I would like to point out that the difference between exchange and sale mentioned by Bhanu, is apt. And it will help you clear the doubt totally. But still, I would like to explain the distinction between sale and exchange in my own words. So, let me share the difference between sale and exchange. Sale Sale can be done only if it is an immovable property. A sale cannot be done without paying a certain amount of money. Legal documentation such as a receipt or sale deed is required for the sale of a property. Exchange Exchange can be done in both movable and immovable. Exchange is done when one property is transferred to another property. Legal documentation may not be required for the exchange of property. This is all I have to say about the difference between sale transfer or exchange. I hope you find this helpful. Read more: What is third party transfer ? What is exchange under Transfer of Property Act?

Arpita C · Answer 3 · 2023-06-29T13:26:58+00:00

The concept of sale and exchange in property law is simple. Before elaborating their meaning in Transfer of Property Act, let me share what they actually mean. Sale means the transfer of property from one person to another and exchange means to part with, give or transfer property. The concept of sale and exchange in transfer of property act is also similar. Since I have learned a great deal about it, let me state their meaning in simple terms.

What is meant by sale or exchange of property?

As per The Transfer of Property Act Section 54, Sale is the transfer of ownership in exchange for a price promised or paid, part paid or part promised. The term Exchange as per Section 118 refers to the process where two persons mutually transfer the ownership of one thing for the ownership of another. I hope the basic sale and exchange difference is clear to you now. Some other differences between the two are-

Sale	Exchange
It is a unilateral transaction where one party transfers the property to another in consideration of monetary value.	An exchange involves a mutual transfer of ownership of two properties between the parties involved
In a sale, the ownership of the property is transferred from the seller to the buyer. The buyer becomes the new owner of the property.	In an exchange, there is a mutual transfer of ownership. Each party becomes the owner of the property received in exchange.
The sale price is determined based on negotiation between the buyer and the seller or market value. The price is usually monetary and represents the agreed-upon value of the property being sold.	The values of the properties being exchanged may or may not be equal. The parties involved negotiate and agree upon the relative values or make additional payments to equalise the exchange.

This is the meaning of sale and exchange in property law. Get your legal doubts clarified anytime by NoBroker’s legal team Read More: What is exchange under Transfer of Property Act? What is holding over under transfer of property act? What is Constructive Notice in Transfer of Property Act?

Difference Between Sale and Exchange?

Sale:

Exchange:

Difference between Sale and Exchange under transfer of property act.

What is meant by sale or exchange of property?

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Difference Between Sale and Exchange?

Sale:

Exchange:

Difference between Sale and Exchange under transfer of property act.

What is meant by sale or exchange of property?

Leave an answer

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Recently Published Questions

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